Bitcoin (BTC) traders may be nervous ahead of the Federal Reserve’s rate hike decision, but research suggests bulls are mostly gaining ground.
In a new update on July 26, analyst firm Arcane Research reported an “improvement” in sentiment among institutional traders.
The climate still improved cautiously
While attention has been focused on the likelihood of a deeper macro bottom for the upcoming BTC/USD pair, it seems that not all investor cohorts are ready to break the exit.
Even at current prices 70% below all-time highs, institutional sentiment is strengthening. For Arcane, this is proof of the growing premium paid by CME bitcoin futures clients.
This premium, although still low compared to the levels already achieved, increased during the second half of July.
“Coin premiums are now at similar levels on the CME and offshore exchanges, indicating that market sentiment has balanced across different trader groups,” the update said.
“Although the base premium on the CME has increased, it is still only 2.2%, a historically low level. This suggests that while sentiment is improving, traders are still cautious. »
Similarly, funding rates on derivatives platforms are currently slightly negative, reflecting a conservative view of future price action by traders. A very negative average funding rate would indicate that the perception is that a price drop is expected.
“However, funding rates are much higher than they were for most of June, when the effects of capture rippled through the market,” Arcane continues.
As reported by Cointelegraph, the Crypto Fear & Greed Index continues to provide commentary on growing investor confidence, ending its longest stay at the lowest “extremes” zone recently.
However, Arcane cautioned about the level of leverage taking place in the market, resulting in “high” open interest.
“This high leverage makes the market vulnerable to short or long pressure if a significant price movement occurs to one side or the other,” he said.
No relief for the GBTC “premium”.
Still struggling in the current environment, Grayscale Bitcoin Trust (GBTC) is showing little signs of improvement.
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The giant bitcoin fund still had a negative “premium” of more than 30% as of July 27, marking some of its steepest discounts to the bitcoin spot price in history.
According to data from Coinglass, a monitoring resource on a chain, The GBTC discount that day was 31.75%, which is equivalent to buying bitcoin at about $14,700.
As Cointelegraph previously noted, Grayscale is currently embroiled in a lawsuit against US regulators over their refusal to license an exchange-traded fund (ETF) based on spot bitcoin. GBTC, once authorized, should be converted into such an ETF product, the company said.
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